The Horror of the Euro Zone Debt Problem

The problem all over the world where the free spending has been so rampant is similar to What Jesus faced, As long as he was handing out free fish and bread they wanted to make him king, when the truth came, man does not live by bread alone, the people wanted to kill him.

6:05 am May 25, 2011

Western Decline wrote:

Its not the monster of default risk, but the end result of the very delusion of the perpetual machine of prosperity as commonly advocated in the US by Paul Krugman i.e. visions of higher prosperity through lower incentives to produce. It is this version of Hope and Change that is what has risen from the crypt in Greece and more generally in Europe.

When some of the most important things in life, such as education, healthcare and some retirement money are unconditionally guaranteed (albeit at an inevitably mediocre level) how many people have the desire to achieve excellence, when nice Grecian beaches are awaiting and when a large part of the rewards of any excellence will go to support those who have chosen mediocrity under the Greek sun?

Isn’t it clear why the West is in decline? Ironically Greece is considered the cradle of Western civilization and Democracy. How appropriate for it to serve as proof that you cannot simply vote into existence the Paul Krugman perpetual economic machine of prosperity, i.e. visions of higher prosperity through lower incentives to produce. Won’t happen! But, by golly, we have to try every single incarnation of that delusion before we give up. It will be too late by then. By then you’ve become Greece. As I said many times, the point of no return has passed for the US too. More cycles of “hope and change” are on the way. The US will never regain the 4.5% growth rate that will enable it to keep its #1 standing on the worldwide prosperity scale. Privileged life, as you know it, is over dear Americans. Lights out! If you think things are bad now, wait until you become more equal.

2:43 pm May 25, 2011

Mr. Dick Turpin wrote:

Leaders of Eurozone nations (Germany and France, in particular) need to explain to their respective constituents why it's essential that tax dollars be used to support Greece even during times of economic austerity. The high road (and that's the only road that ever matters in the long-run - Abe Lincoln proved it) is to hold the Eurozone together no matter what - even if it means the entire continent suffers economically and socially over the next decade. This is SO much more than whether you can afford that vacation in Spain or buy that Porsche.

7:20 pm May 25, 2011

Zeus wrote:

…why it’s essential that tax dollars be used to support Greece even during times of economic austerity?

Because, Social Democracy is the prevailing ideology in Europe. Under such ideology it is ok to force those who produce more to support those who (most often incentivized by the Welfare State itself) choose mediocrity.

Under such ideology, it becomes morally indefensible to support the Dutch or German citizen who chooses mediocrity but not the Greek or Portuguese citizen that does the same. It is only a matter of time before this ideological dissonance is resolved and the more productive amongst Europeans accept and acquiesce to a more permanent transfer of wealth between once independent European nations. Just like the Italian North perpetually supports the Italian South, just like the English South perpetually supports the English North, etc. so will the more productive Germans and Northern Europeans end up perpetually supporting the more mediocre South. Perhaps in fits and starts and with occasional backtracking, that will be the eventual state of the European Union.

This, of course, will only further hamper the resolve of those still productive amongst Europeans to continue producing and thus exacerbate Europe’s existential problem. Even under current incentives, Europe is already anchored to a long term 1.5% annual growth trendline, in a world that is now growing at a 4.5% annual average. The European Western standard of living advantage compared to the rest of the world continues to erode by 3% per year, the losses perpetually compounding. Europe has been and will continue to ride history into insignificance. The new united Europe trans-national redistribution incentives will further accelerate this decline.

11:33 pm May 25, 2011

Thargonist wrote:

There's more to life than money.

12:24 am May 26, 2011

KTD wrote:

Exactly, so why worry that Greece has run out of money?
I’m sure Greeks can be happy with less money, after all… there’s more to life than money.

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